eBay: A Wholesale Market

One thing we seem to be constantly reminding people of on our member's forum is that eBay is a wholesalers market. People identify with eBay as a place to pick up a bargain. I'm sure when you search for an item on eBay you look there because you hope (and expect) to find it at a price significantly below what you can buy it for in a brick and mortar store. It’s something we all do.

Why is it then that we regularly get irate or disillusioned posts from members who are horrified to find that they can buy an item cheaper on eBay than they can from a wholesaler?

It can't be both ways - you can't have a market that everyone identifies with as cheap and yet the sellers are still making a killing. Somewhere in the supply chain, someone is going to suffer the consequences.

I don't mean to make it sound as though making money from eBay isn't possible - it most definitely is. It's just that eBay is a wholesalers market. Many items (particularly hot consumer electronics etc), sell for below wholesale on eBay! That's why some people make a killing by buying stuff off eBay and selling it on their own websites or in newspapers and magazines for a higher price!

Items such as Xbox, Playstation, designer handbags, Nikes, the list goes on, are very difficult to profit on.The only way people make money from these items is when they are (a) a big seller who can afford to purchase in bulk (i.e. thousands of dollars worth at a time) or (b) by getting a liquidation or clearance lot for below cost price.

Once you face the fact that eBay is a wholesalers market you can stop wasting time trying to find a wholesaler that beats eBay’s prices and start developing a niche or buying liquidation. Then, when money starts to roll in you can contact wholesalers and start negotiating deals with them (yes wholesalers will often give you better prices if you contact them direct rather than just going off their website!). This is the way money is made on eBay today.

Have a great week!

Comments (2)

JordansAutoAccessories.com
on 23:09 24 Apr

Hi Salehoo. Thanks for the valuable insight. Could you shed a little light here (and forgive me for my perceived ignorance): For an eBay seller like me - how would SaleHoo help me if indeed eBay is a "wholesaler's" market - doesn't SaleHoo connect sellers like me with Wholesalers? And can you please define how developing a niche may trump this dilemma of sellers being pushed out of the wholsaler's market?

on 16:41 25 Apr

Hi – These are both excellent questions: Firstly, this post is directed mainly at new sellers who believe they can make money from buying 5-10 Xboxes wholesale and selling them on eBay. Salehoo does indeed connect sellers with Wholesalers, but we are trying to help new sellers understand that buying wholesale doesn’t automatically make millions. You have to be prepared to put in time and research to hunt out the best possible prices. This includes:
(a) Making contact with wholesalers by phone/email to develop a proper business relationship where better prices can be negotiated.
(b) Have the resources to purchase larger quantities in order to get better discounts. If you can’t afford this option, look at other strategies such as buying liquidation.
(c) Consider buying from countries such as China where the manufacturing costs are low and there is more room to profit.
For this reason, Salehoo provides contacts for wholesalers, liquidation/clearance, drop shippers and Chinese suppliers so that members can compare prices and work out the best option for them. It is possible to profit on eBay, it just requires a lot more research and negotiation than some people realize.
To answer your second question: Developing a niche effectively negates the issue of eBay as a wholesalers market. If choice is limited, people are prepared to pay the full retail price – maybe even more. If you look at the eBay Buyer Report (in the Seller Central area), this tells us that the top reason eBay buyers use eBay is to find unique items – items they can’t just go down to the nearest Walmart and buy. We believe this is one of the best ways of making money from eBay.
Hope that answers your questions :)